Investing
I invest in businesses that increase human freedom. That might sound grandiose, but it's practical. Economists have found a clear correlation between freedom and prosperity. I invest in businesses that produce prosperity by expanding freedom.
Focus areas
I focus on the basics. It's amazing how many obstacles there are to basic human freedom, even in the modern world:
- Health. People cannot be free without a healthy body and a sound mind. They can be more free with the ability to overcome disease and psychological hardship.
- Education. People cannot be free without knowledge and skills. They can be more free with critical reasoning and the ability to create new knowledge.
- Money. People cannot be free without a sound currency that is widely valued and easily traded. They can be more free with ways to invest their wealth, and other people can become more free through those investments.
- Time. People cannot be free without time to enjoy their lives. They can be more free with tools to increase their free time, and more ways to benefit from that time.
Some specific opportunities
There are some enormous markets that are considered stable, but are deeply vulnerable to change. These markets are sources of tremendous friction, waste, and burnout. I focus on a few of them.
- Payments. The United States is one of the last countries in the world to lack a standard for instant payments. Right now, you can choose between fast, safe, and inexpensive – and get two of three at best. A profusion of payment technologies isn't solving the problem. We continue to suffer from payments that are either sluggish, dangerous, or costly. For example, credit cards continue to be the most popular payment method for retail, but they are insecure and incredibly expensive for merchants. I'm excited to see what will be possible with FedNow.
- Food and water. Clean, substantial nutrition matters to everyone. It's impossible to be healthy without it. That's especially true for the young. For example, human brain development is extremely sensitive to chemical interference. Yet municipal tap water is disturbingly contaminated across the United States – just pour yourself a hot glass of water and you can smell it. Further, most "food" for sale at grocery stores and restaurants is light on nutrition and heavy on artificial ingredients, sugar, and chemicals, which are harmful to the body. For the first time in history, a majority of Americans are overweight. Incredibly, obesity is considered "a disease of poverty". Reverse osmosis, clean agriculture, and new eating traditions are what we need.
- Automation. The information economy is pervasive, at work and at home. In spite of its transformative benefits, it is also cultivating burnout and other psychological diseases. A lot needs to change, but the main theme is that we need more peace. Yet at work and at home we are inundated with information and tasks. We need more peace and less busy-work. Automation can help with both. We haven't even finished with digital automation yet, and the AI age is arriving. There is huge opportunity for us to automate happier, healthier lives.
- Government. In the United States, government is generally a person's largest expense. Yet polling shows the average American is extremely dissatisfied with government. Americans understand government failures are harming their quality of life and burdening future generations. While it's not realistic to expect government to change, it's possible displace government over time. The private market can empower people to retake sectors of the economy that have suffered unintended consequences from government intervention. The most prominent examples are healthcare and education. Voluntary cooperation in the private market can deliver vastly better outcomes.
Investment criteria
You must have a hypothesis that is clear and compelling. That means you must be able to articulate, quickly and elegantly, a discrete problem, your insight, and your solution. Beyond that, you must be able to answer Peter Thiel's "7 Questions":
- Engineering. Are you creating breakthrough (rather than incremental) change?
- Timing. Are you starting at the right time?
- Share. Are you starting with a big share of a small market?
- People. Are you starting with the right team?
- Distribution. Are you able to identify and reach your potential customers?
- Durability. Will your business be defensible for decades?
- Secret. Have you identified something others have not seen?
Consulting for equity
If you need hands-on engagement, "consulting for equity" arrangements may be possible. These are a simple, effective way to deliver immediate value to your business.
Commissions for leads
If you send me a lead on an acquisition, and I ultimately close a deal, I will pay you a commission.